The effects of road pricing on driver behavior and air pollution

Matthew Gibson (1) , Maria Carnovale

1 Williams College

Exploiting the natural experiment created by an unanticipated court injunction, we evaluate driver responses to road pricing. We find evidence of intertemporal substitution toward unpriced times and spatial substitution toward unpriced roads. The effect on traffic volume varies with public transit availability. Net of these responses, Milan's pricing policy reduces air pollution substantially, generating large welfare gains. In addition, we use long-run policy changes to estimate price elasticities.

Domaines: Economies et finances

Matthew Gibson, Maria Carnovale. The effects of road pricing on driver behavior and air pollution. Journal of Urban Economics, 2015, 89, pp.62-73. ⟨10.1016/j.jue.2015.06.005⟩. ⟨hal-01589743⟩